The deal concerns lithium-ion batteries manufactured at the Tesla Gigafactory in Nevada (the cylindrical 2170-type).
The 2020 Pricing Agreement (effective as of April 1, 2020 until March 31, 2023) is about lithium-ion cells produced at the Tesla Gigafactory in Nevada (the cylindrical 2170-type used in Model 3, Model Y and energy storage systems).
The brief announcement mentions several topics of the agreement (without providing any details):
- “sets forth the specific terms between the parties with respect to pricing”
- “planned investments and new technology”
- “production capacity commitments by Panasonic and purchase volume commitments by Tesla over the first two years”
“On June 10, 2020, Tesla and Panasonic also entered into the 2020 Pricing Agreement (Gigafactory 2170 Cells) (the “Agreement”), effective as of April 1, 2020 until March 31, 2023, relating to the manufacture and supply by Panasonic of lithium-ion battery cells at Gigafactory Nevada. The Agreement is subject to the 2020 GTC and, among other things, sets forth the specific terms between the parties with respect to pricing, planned investments and new technology, as well as production capacity commitments by Panasonic and purchase volume commitments by Tesla over the first two years of the Agreement.”
In other words, the two partners agree on pricing over the next three years and on volume over the next two years. The part about the “planned investments and new technology” suggests that they are trying to figure out the business model ahead of the upcoming changes (maybe an implementation of new battery chemistry).
A separate change is in the General Terms and Conditions:
“On June 10, 2020, Tesla, Inc. and Tesla Motors Netherlands B.V. (collectively, “Tesla”) and Panasonic Corporation and Panasonic Corporation of North America (collectively, “Panasonic”) entered into an amendment and restatement (the “2020 GTC”), of the General Terms and Conditions entered into between Tesla and Panasonic on October 1, 2014, as amended, which governs certain agreements for Panasonic to manufacture lithium-ion battery cells for Tesla at Gigafactory Nevada. The 2020 GTC, among other things, modifies the term to expire 10 years after Panasonic achieves certain manufacturing milestones.”
Panasonic’s operation at the Gigafactory plant was profitable in Q1 2020, for the second consecutive quarter.
The site was expanded to 35 GWh of cells annually, and in late 2019 we saw rumors about an option for further expansion to 54 GWh.
This article originally appeared on Inside EVs.